Silicon carbide (SiC), Gallium Arsenide (GaAs), Gallium Nitride (GaN), Indium Phosphide (InP)… Compound semiconductor materials currently represent a relatively small market compared to the enormous Si industry. However, while the growth potential of Si chips seems to be more conservative at the moment, the compound semiconductor industry enjoys a better outlook, with double digit growth potential in different market segments. At the beginning of the year 2019, it is a good time to review what happened in the year 2018 in the compound semiconductor industry and to share our views and questions for the New Year.
If I need to highlight one compound for the year 2018, it would be SiC. The rumors of Tesla using SiC in its inverter was verified by reverse engineering analysis (Tesla Model 3 Inverter with SiC Power Module from STMicroelectronics report by System Plus Consulting, partner of Yole Développement). The impact of this event is much more profound than we could have imagined. In Q3 & Q4, the inflow of information on SiC continued increasing, directly from both OEMs and Tiers 1. This trend was also confirmed through discussions with numerous people during Semicon Europa and Semicon Japan. The automotive sector will no doubt be THE driving market and it is expected to absorb the global capacity. Yole Développement’s (Yole) question for 2019 is whether the SiC supply chain (from materials to modules) is ready and is tracking the industry evolution (Power SiC 2018: Materials, Devices and Applications report by Yole Développement).
(Source: GaAs Wafer and Epiwafer Market: RF, Photonics, LED and PV Applications, Yole Développement, July 2019)
GaAs is the material that to my mind is in second place. GaAs experienced a roller coaster ride in 2018: from the hype at the beginning of the year with the adoption by Apple of GaAs based VCSELs in its iPhone X for 3D sensing applications in late 2017, to the reduction of the business outlook of Lumentum and IQE at the end of the year due to the reduction of shipments to Apple. Indeed, Apple seems to have some difficulty in repeating its glory with its latest models. Some people are wondering if there is a potential VCSEL bubble. Fortunately, GaAs is not limited to Apple. 5G PA is expected to provide a stable market for GaAs, while Android platforms are exploring the 3D sensing market and Lidar will gradually consume increasing amounts of GaAs wafer, whether it is VCSEL or EEL. As indicated in our latest analysis, GaAs Wafer and Epiwafer Market: RF, Photonics, LED and PV Applications report, GaAs photonics is a rising star. Yole can’t wait to see how these drivers will move the markets in 2019.
I should say something about GaN – the material that has inspired so much expectation. GaN on SiC, GaN on Si, GaN on GaN or even GaN on diamond, different technology platforms are heading for different applications: 5G infrastructure, fast charger, wireless charging… GaN is associated with the cutting-edge technologies. I keep being surprised by the discoveries of some companies that are developing something with GaN, for RF or for power electronics that I would never have imagined.
Yes, there is much to say about compound semiconductors: InP, although still niche, is expected to be pushed by Datacom to new heights. Gallium Oxide is also a material that has begun to garner some interest. Could the spark turn to a rising star?
Last but not least, let’s have a review of noteworthy M&A and collaboration activities in late 2017-2018, which witnessed the market dynamic of the compound semiconductor industry:
- Showa Denka acquired Nippon Steel’s SiC activities;
- MACOM and STMicroelectronics teamed up to “bring GaN on Silicon to mainstream RF Markets and applications”;
- II-VI claimed to acquire Finisar to create “a global leader in photonics and compound semiconductors”;
- Infineon acquired Siltectra to expand its “excellent portfolio with the new material silicon carbide”…
What will be next?
Hong Lin, PhD works at Yole Développement (Yole), as a Senior Technology and Market Analyst, Compound Semiconductors within the Power & Wireless division since 2013. She is specialized in compound semiconductors and provides technical and economic analysis. Before joining Yole Développement, she worked as R&D engineer at Newstep Technologies. She was in charge of the development of cold cathodes by PECVD for visible and UV lamp applications based on nanotechnologies. She holds a Ph.D in Physics and Chemistry of materials.
Automotive is putting SiC on the road. Is the supply chain ready? – Get more here
GaN market growth is fed by LiDAR, wireless charging and fast charging solutions. – Get more here
Photonics applications are driving the GaAs wafer and epiwafer market into a new era. – Get more here
The first SiC power module in commercialized electric vehicles. – Get more here
As one of the most mature compound semiconductors, GaAs has been ubiquitous in RF applications, particularly in power amplifiers in handset, as well as in red-orange-yellow LED applications. However, since 2017 GaAs wafer has been particularly notable in photonics applications. Apple, with its iPhoneX put under the spotlight on GaAs-based VCSELs, using for 3D sensing function. – Get more here
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